Wednesday, June 25, 2014

Unpaid Debt To Veterans

In the 1770s-1780s, thirteen individual colonies came together to fight a revolution for their independence from England.  To fight that revolution, America’s first national army was created under George Washington, supplementing the thirteen individual state militias.  From their brave actions, independence was achieved, and a (weak) form of national government for “The United States Of America” was first instituted under the Articles of Confederation.

As a show of thanks for the dedication and courage of the soldiers, promises were made.  Many of the soldiers had purchased the promissory securities issued by the states and the Confederation Congress to help finance the war, and were looking to be paid for their show of faith.  In addition, pensions were promised to officers, and bonuses to enlisted men.  And many were given land bounties in government-owned properties as signup bonuses.

All well-intentioned, except that the Confederation Congress had no money, and no power of taxation to raise funds, to make good on these various promises.  Pensions were not funded until 1818, 35 years after the Revolutionary War formally ended, and even then the eligibility criteria were narrowed within the dwindling pool of remaining veterans.  The bonuses never materialized.  And the debt securities and land bounties held by the veterans?  Most veterans sold them off at a discount to financial speculators, believing that they had become worthless.  Those speculators in turn colluded with Alexander Hamilton, the nation’s first Treasury Secretary, to have these shaky debts taken over by the new federal government and paid off at full face value.  The veterans got pennies on the dollar; the speculators got dollars on the dollar at a good profit.

And so was established the pattern: after all of the speeches and parades were over, the promises made to those who sacrificed life or body in service to our country would find those promises reneged on the chopping block of “the budget.”

The pattern has continued ever since.  In the boom times of 1924, Congress passed a $500 bonus to our World War I veterans, but not payable until 1945.  After the Great Depression hit, in 1932 thousands of these veterans descended on Washington demanding an earlier payment to help offset their severe economic loss of property and income.  They lived in make-shift shanty encampments around Washington, similar to the many “Hoovervilles” of destitute homeless people springing up around the country.  When Congress refused the payments, President Hoover ordered General Douglas MacArthur to destroy the veteran camps, which he enthusiastically did – active soldiers using tanks and cavalry attacking their unarmed brother veterans.  This bloody incident contributed to Hoover’s massive defeat for reelection four months later.

Franklin Roosevelt, intent on avoiding another “Bonus Army” debacle, worked with Congress in 1944 to pass the G.I. Bill for the forthcoming veterans of World War II.  The bill called for major federal assistance in preferential hiring, educational grants, home mortgage assistance, and continual health care.  This G.I. Bill contributed mightily to America’s 20-year post-war economic boom.  They are programs that continue to this day for the new generations of veterans.

Nevertheless, veterans still have had to fight against institutional resistance to treating the effects of Agent Orange exposures and PTSD in Viet Nam.  Iraq and Afghanistan veterans are having to fight for assistance for more severe cases of PTSD, debilitating long-term injuries that would have meant death in previous wars, and potential diseases and contaminations that have not yet fully surfaced.  But instead of needed health care, what they more commonly get is a bureaucratic runaround, a nightmare of indifference, a callous disregard for these special human beings.  All in the real motivation to protect some administrator’s job and/or some politician’s personal power base.

The only thing “new” about this obscenity are the many claims from all quarters that “we didn’t know there was a problem.”  Living veterans back to WWII, Korea, Viet Nam and forward, can all tell their horror stories with consistency, commonality and regularity.  Stories of a lack of effective service delivery, drowning in paperwork and forms, emphasis on procedure over end result, and priority given to “the system” and the politicians who fund it instead of priority to the veterans.  The scope of problems transcends time and political party and any one leader.

It is easy for one to snap to attention, whip out a snappy salute, say “thank you for your service” while patting an active soldier or veteran on the back, or make a Memorial Day speech at the local National Cemetery.  It is not as easy to put substance into these token images.  Many of the people spreading this rhetorical imagery are the very same people who defend (in hidden background) current Veterans Administration personnel, and vote against the funding needed to fulfill the promises made.  Negative votes because the government supposedly “can’t afford it.”  Such rationalization conveniently forgets that America has NEVER paid cash for any war that it has fought.  Starting with our Revolution, our wars have always been funded by debt.  The entire Iraq/Afghanistan wars were funded “off the books” as “special appropriations” to hide their explosive expansion of our federal budget deficit and national debt.  That failure, and the massive and deliberate failure to correctly project the true cost of these wars – in dollars, time, and human casualties – led to the current over-demand on VA services.  It should not have been that hard to foresee, IF the welfare of veterans was truly on the radar of the military establishment, VA administrators, and Congress.

We can, and should, yell at government officials from over the past twelve years for ignoring our commitments and for being a hurdle to needed services.  But let us avoid the easy political finger-pointing that “Bush did that,” or “it’s all Obama’s fault”; that rhetoric will cause no real action to get done.  Responsibility for such near-criminal conduct is spread all over Washington, to past and present occupants.  Such failure is unfortunately part of our historical tradition.  So let us stop the hypocrisy of patriotic grandstanding versus substantive action.  Do not tell a veteran that we were fine with borrowing money to buy the planes and the tanks and the rifles, but the People who fired those rifles are not worth the same IOUs.  The armaments of war make many people very wealthy.  Fitting a prosthetic onto the stump of a leg does not put much cash into the bank account of either a veteran or his/her VA doctor.

We can argue all we want about lower tax rates, reduced spending, and smaller government.  But the veterans who have made any government possible gave anything but a small commitment.  Follow-up support for our veterans is as much a true “war cost” as was the fighter plane.  We need to step up to the plate, America.  It is a proper bill to be paid that is way past due.

“The Veterans Administration will be modernized … as soon as possible, but I can’t do it immediately.”  (President Harry Truman, May 15, 1945)
©  2014   Randy Bell

Wednesday, June 4, 2014

Sharing The Success

For those statistics junkies in the world, there were some very intriguing numbers recently released by several new organizations.  According to Fortune magazine, the average Fortune 500 CEO now makes 331 times as much as their average worker.  This is up from 46 times in 1983, and actually down from 455 times at the peak of the technology boom in 1998.  These are not ratios against starting or bottom-rung salaries, but the average of all salaries.  In dollar and cent terms, “331 times” means that if you are making a “getting-by” salary of $30,000/year, your CEO would be making $9,930,000; if you are making a more reasonable salary of $60,000/year, your CEO would be making $19,860,000.

Another survey by Bloomberg News of 250 of Standard & Poor’s index companies gets more specific.  Comparing CEO pay to average worker salaries in individual industries, Ronald Johnson’s $53M salary at JC Penney leads the pack with pay “1795 times” the $29,688 average salary for general merchandise stores.  (JC Penney has spent the last several years trying to stay one step ahead of bankruptcy, so this salary seems even more extremely unfathomable.)  Even Michael Duke, CEO of the oft-villainized Wal-Mart, is “only” #18 on the list with a “611 times” ratio.  The entire list of 250 companies makes for some interesting reading.

Even in this era of staggering CEO pay and golden parachute firings – compensation usually set by fellow CEOs with similar salaries and benefits looking out for each other – “331 times” is hard to comprehend, much less “611 times” for a failing company.  But when corporate revenues are consistently talked about in multi-billion dollar terms, and profits in 8-9 digit millions, it is hard to connect those numbers to the thousand dollar salaries of real-life people.  Then again, when head football coaches make more money than the collective salaries of the state’s governor and the entire cabinet, and baseball players sign $100M contracts, and “celebrities” with little demonstrable creative talent earn fortunes from allowing voyeurs to peer into every moment of their (fictional) personal lives on cable TV, then is it any wonder that we have lost our perspective about the value of real work in this modern American age?

This is not a criticism about individual wealth in America.  Certainly not a criticism of personal success, which is one of the historically and wonderfully notable facets of American’s many enviable stories of human creativity.  Rather, it is a questioning about how much wealth is “enough,” versus an insatiable accumulation that knows no bounds and ultimately can never satisfy its accumulator.  It is a questioning about to what ends one will go in pursuit of that wealth in disregard of ethical and legal boundaries, and the morals of religious teachings.  And it is a questioning about recognizing our obligations and responsibilities to others who join us on our career road, the many who make possible the success of the one.

This is also not an argument for “income redistribution.”  It is a push to acknowledge that a CEO and his/her employees are all in it together.  MUST be in it together.  Because in reality, no CEO succeeds unless the workers on the line, the salesman in the field, the receptionist answering the phone, and the product designers in the lab, are successful in their endeavors.  Because if the product is bad or unreliable, or the service is unresponsive or uncaring, then all the spreadsheets and strategic plans and organizational skills from the CEO will be worthless in generating company profit.

Greed and ego may drive a CEO to great heights in the short term, but it is a dangerous precipice from which to fall over the long haul.  And the employees, shareholders, and customers will be the worse for allowing that kind of self-worldly view to sit at the power pinnacles of America’s companies.  And thereby so we see once proud corporate names that once personified America for generations instead falling by the wayside – witness Sears, JC Penney, AT&T, and numerous automobile brands that once personified the power and allure of American industry.

The truth is, CEOs do not make any products, do not sell products to a customer, do not fix them when they are broken.  A company only survives and thrives by making a sale – and a CEO does not sell anything; employees do.  A CEO’s only real job is ensuring that the right people are in the right place to do the right work for the right people under the right conditions.  And then hope that those folks come through because good decisions have been made.  If a CEO’s pay goes up, it should only be because the corporate profits went up, and as a result, everyone’s pay should go up in the same proportion.  It is not about limiting CEO salaries; it is about sharing that result and reward with everyone who made it possible.  CEO wealth by itself does not make them “job creators” or add much to our GDP, and no company (except badly managed ones) ever went broke raising the minimum wage for their employees.

CEOs deserve higher pay because their actions and decisions affect greater numbers of people and corporate outcomes.  So all salaries are, and should be, proportional to the scope of an employee’s impact – at all levels.  But success and failure is a shared outcome, and should be reflected in shared compensation.  When Ronald Johnson at Penney’s makes 53$M dollars, and Michael Duke at Wal-Mart makes $18M, yet many of their employees must rely on public benefits to feed and clothe their families, then the understanding of this “shared responsibility and mutual interdependency” has clearly been lost.  And the buying public, who are frequently critical of such CEOs and companies, nevertheless implicitly supports this blind callousness as a result of their continued shopping decisions.

There is a prayer some say at mealtimes in which the diners acknowledge “the ten thousand people” who made that meal possible.  That prayer serves to remind us of all the many who came together for our benefit in order to provide that simple slice of bread on our plate.  So also the thousands who made possible that CEO’s success, such as one’s parents and family; the friends throughout life; the many teachers, and the taxpayers who funded the free, public education; the mentors, and the good, caring managers who encouraged and promoted; the indirect contributors who provided the raw materials and infrastructure needed by the company; all of the aforementioned employees; and so many forgotten others.  We do and should recognize and acclaim the successful go-getter and entrepreneur who creates something from nothing, advances one’s personal status, and  achieves great personal triumphs.  America has always rightly admired and benefited from such people – the theoretical “self-made person.”  But when a CEO forgets where s/he came from, and that “lone rangers” and never truly “lone,” then admiration equally deservedly goes down.  Financial failure then lurks around every corner, and spiritual bankruptcy replaces the illusion of “success.”  No amount of money can buy back that kind of bankruptcy of character.
“When you drink the water, don’t forget those who dug the well.”     (Chinese proverb)
© 2014   Randy Bell